I don’t usually write political material in this blog.  Instead I like to focus on issues of culture and engagement at work.  But these things don’t occur in a vacuum:  underlying everything, the highly intertwined political and capitalist systems with which we live are the bedrock on which all is built and sustained.  They affect the culture in our workplaces, in turn the engagement of workers and therefore the performance of our organizations.  With my co-author and friend Professor Sir Cary Cooper, we strongly expressed the view in our 2012 book that capitalism…of which we are both huge fans… has to change, it has to work for everyone, not just the few.  What I find very interesting at this time is that the 2016 election process here in the US has laid bare issues with capitalism which came to light most strongly with the 2008-9 financial crash but were also fueled by accelerating globalization and ever-increasing automation;  we now find two leading contenders for president tapping into an anger about where things stand.

In rally after rally, the candidates with the biggest “buzz” and the largest crowds are Mr Trump and Senator Sanders, who seem to electrify their audiences with rather similar messages even though they are from different political parties and disagree on many ways of fixing things.  But on the question of capitalism and government actions or inactions which affect the workplace, they seem to be aligned:  enough with outsourcing of jobs by indifferent companies fixated with getting the lowest tax rates for themselves and the lowest wages for their workers;  enough with unlimited and illegal immigration which dilutes the value of entry-level and lower education-based jobs and has decimated employment among native-born workers in industry after industry, like construction.  Enough with trade deals which say they are equal and fair but always seem to leave the US side running deficits and result in the loss of many US jobs.  China is the example they both give, and with good data backing them up.  Enough with big companies committing financial crimes and making us all vulnerable, then facing no consequences.

At the basis of a lot of this darker side of capitalism, is what Jack Welch called a “dumb” idea, and which other writers and bloggers hammer as often as they can:   “maximizing shareholder value“.  It sounds like a good idea, but it isn’t:  it rewards just one of the stakeholders of a for-profit organization, at the expense of others.  What about workers (who are often not shareholders)?  What about communities in which the businesses are based?  What about customers?  What about the country as a whole, often abandoned when “inversions” are used to escape to low tax havens like Ireland?  They are all stakeholders too, don’t they matter?   “Shareholder value” is also a sly way to enrich C suite level executives, already paid far, far more than others around the world:  CEOs in the US make some 500x the average workers in their own companies compared to those in nearly all other developed countries.  This in turn demoralizes workers in the same company, especially when that CEO stands up in difficult times and says “we’re all in this together”.  “Shareholder value” focus makes this huge discrepancy in pay not only possible but almost inevitable.

So when Donald Trump talks of “making America great again”, which is his core theme, can we blame people whose lives have been affected by all this from attending his rallies and expressing rage at what they see has happened?  When Bernie Sanders thrills his mostly young listeners with talk of a “revolution”, should we be shocked that people feel that things are stacked against them?  That they might be the first US generations not to take part in the American Dream?

I repeat that I say all this as a huge fan of capitalism and I want to emphasize  that I am not naive enough to think that all this is some big conspiracy by leaders of our companies.  As Daniel Pink has written in his brilliant book, A Whole New Mind, technology advances and globalization are inevitable trends which will put people out of work no matter what.   But that is not all that is happening, there are choices being made and besides it is how we respond to all this, that is important.  And as Ronald Reagan’s former speechwriter and Wall Street Journal editorial writer Peggy Noonan recently wrote in a superb piece, people are fed up feeling like they are left “unprotected” as these massive events wash over them, while political elites (Peggy’s word not mine) float above the fray with all the protection in the world.  Perversely, these elites often prescribe taking away some of the few protections which the unprotected might have gained over time, such as health care.

For Bernie Sanders, a move towards a European like socialism is the way forward.  I grew up in pre-Thatcher socialism in England and my response to that is a big “no thanks!!”  Mr Trump would scrap all trade deals and attempt to deport 11 million illegal immigrants: an impossible and expensive task.  There has to be a better way, and there is:  without the heavy hand of government regulation, our capitalists and politicians need to wake up and start to focus more on making the system work for everyone, and not for the already “protected”.  Lets dump “shareholder value” for a start.  Forget the shameful talk of scrapping the new health care law (“Obamacare”) which has brought more than 10 million into the ranks of the insured, a perfect example of making life better for some of Peggy Noonan’s “unprotected”.  Get tougher on trade deals.  There is much to do, not moving towards a socialist utopia as Senator Sanders would wish, but by fixing the capitalist system which has brought so much to so many.  If we don’t make this happen, the rage of the “unprotected” might just push us towards something far, far less capable of delivering the American Dream to future generations.  As Peggy Noonan says in her article, this is a moral issue which for me includes but extends well beyond politics:  capitalism can…it must…change.

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For more about my work as a speaker, author, consultant and researcher in work morale, engagement, culture and emotional intelligence, please visit my website at: http://www.davidbowlesphd.com

LinkedIn profile/contact: http://www.linkedin.com/in/davidbowlesphd

Now and then I get on my soap box and complain that one group or another has hijacked an area in which I am interested, like employee engagement or work culture. A nice, very humble piece by Jane Revell the other day reminded me that this is still happening: Jane, an internal communications person, pointed out (among several other things) that it is a myth that such people as herself are the Gods of employee engagement. Amen!

To understand why no one group with a specific background and focus can rightfully make any such claim, it’s important to remember what employee engagement is and isn’t:

–like anything in the social sciences, its complicated. Chemistry types can tell us that water is H2O, every time and every place. No one can make any statement like that about engagement of workers, and in fact there is a debate raging even as I write this, as to what it is. This is not a new phenomenon, it also happened with intelligence, and is happening with emotional intelligence today. Having said that, we do know a few things:

–engagement happens when the organization in question creates a work environment which is so appealing to people there that they have positive emotions about it, they like being there.  I’m not just talking about the physical environment, which is of course important, but much more about the “psycho-social” environment, better known as “culture“.

–as a result, some… but not all…the people who work there are willing to “go the extra mile” in the role they play to achieve the organization’s mission.

–in turn, as long as enough people feel and act this way, the organization benefits from a big performance boost, something which is well documented and easily passes the “common sense” test. Would you rather be served coffee by someone who loves working at that coffee place, or someone who just cant wait to quit and go home?

Now if we break down this scenario, we see a number of elements in it:

–the culture is mainly driven by the values and beliefs of leaders, which they then communicate to workers through various conscious and (often) unconscious means.

–but the culture is also driven by the national culture in which the organization exists, its own history, the business it is in, its particular strategy within that business sector and so on. Again, common sense, always a good guide, tells us that the culture of a company operating nuclear power plants is quite different…MUST be quite different…. from that of a tech startup in San Francisco. And that the Chinese, Swiss or British national cultures will affect work cultures in those countries.

–the reaction to that culture depends on what type of people work there; their personalities, their own values and their past histories, all of which drive whether they choose to engage or not.

–that reaction especially depends on how the culture flows through to the people at work via the structure, people in power and processes of the organization. As one important example of this, it depends on the boss to whom they have been assigned, that boss’s personality, management style and people skills. My data, and that of others, suggests that some 88% of a worker’s level of engagement depends on the relationship they have with their boss, a sobering thought……

–finally, in order to know whether or not (and where) engagement levels are high, low or neutral in any organization, we need to measure and assess what is “out there”. Otherwise we are on a trip with no map to tell us where we are and whether we are getting closer to where we want to go.

I could go on a lot longer, but I will cut to the chase here: look up at the words I have italicized above.  Communication, performance, values, beliefs, culture, emotion, personality, management style, business, strategy, relationship, measurement. Do the people who know the most about these things all belong to one group, like psychologists, internal communications experts, management experts, strategists, etc? Of course not.

So, please….let’s all be a little humble here: I know very little, to be honest, about setting up and delivering a great internal communication plan. I have seen it done by experts and its complicated and requires a lot of skill. But I also know that people with those skills don’t necessarily know so much about personality, emotion, relationships and management theory….and the same can be said for many of the other “experts” who have emerged in this area.

If you are a large enough organization which has determined that these must be core competencies (Google comes to mind), you have some or many of these skills in house. If you are not, you can call on consultants who have them. But always be aware that someone with a limited background who promises you that they can do everything which employee engagement requires will only be able to deliver on a limited set of those things. Caveat emptor, in the engagement field as much as anywhere else.

Unfortunately I believe that poorly executed employee engagement (and culture) efforts are too frequently found in organizations as a result of the things I have talked about here.  Perhaps this is one reason why, with so much effort and money expended, employee engagement levels in major countries around the world (e.g. US, Germany, UK) are stagnant?  One reason, by no means the only one…..

What do you think?  I’d love to know…..

LinkedIn profile/contact: http://www.linkedin.com/in/davidbowlesphd

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“If I had asked people what they wanted, they would have said faster horses”  Henry Ford, founder of Ford Motor Company

I don’t usually review books here but a book recently came to me which I found very compelling.  It is on a subject which I would normally find dry and uninteresting but it makes that subject….strategy…. come to life in a way that I have not seen before.  It does this by taking a new approach, one that is much more comprehensive and holistic than normal.  Specifically, it merges its expansive and compelling ideas on strategy per se with the one thing which makes strategy possible or impossible to execute: culture.

Why Culture Matters:

My favorite strategy quote is from Peter Drucker, the famous Austrian management guru who lived most of his life in California:  “culture eats strategy for breakfast”.  And so it does:  the best laid plans die like seed sprinkled on rocky ground when newly created strategies meet dysfunctional organizational cultures, incapable of bringing those plans to life.  In this book, Marc Stigter and Cary Cooper explain this and many more things in a way that can only be done when their expertise extends well beyond strategy, which is patently the case here.

Let’s begin with some alarming statistics from the book;  it seems that from 70 to 90% of strategic initiatives fail.  This is a staggering number.  Is culture the only culprit?  The way I interpret the meaning of culture, as “the way we do things around here”, it covers most of the reasons the authors put forward for this pitiful track record of strategy implementation. But well before such strategic plans are brought forward to the implementation phase, culture affects the way in which they are created.  This can doom them from the start.

How to Create a Strategy Doomed to Fail:

As the authors point out, a good way to join the 70-90% who fail at this is to use an “inside-out” methodology to strategy formulation; it is an approach which emphasizes the illusion that the organization already has most of the information and resources in-house with which to make its plans, and thereby ignores what the customer wants, and the fact that the world and markets are changing faster than ever before.  Into this mix, blend a rigid timeline: the once-a -year “strategic planning retreat”, a ritual which many probably dread. Be sure to use only certain top level executives for this role, after all they comprise the sum total of all knowledge about what the plan should be, don’t they?  Once birthed, give the plan to mid-managers to implement and blame them if it doesn’t work!

A Better Approach:

Of course, while customer situations like the one Henry Ford refers to in the initial quote here do emerge from time to time (did we all know we had to get an iPod and switch to digital music before Steve Jobs convinced us we could not live without it?), under most circumstances organizations of any kind ignore customer desires at their peril.  Plus the pace of change is such that the annual strategic retreat needs to be replaced by continual “sensing” of market needs. Leaving out mid managers (those who have survived waves of “rightsizing”) and even front line employees in making the plans is also a recipe for failure: if you want them to put their hearts and minds into execution of the plan they have to be part of its formulation. Many of them have far more contact with customers, for example, than C-suite executives: who better to tap when one wants to “sense” the market?

Of course, this isn’t easy, but the authors give us extensive advice as to what to do and how to do it.  Language plays a big role in all this:  it is how plans will be communicated, hopefully inspiring everyone to get on board and enthusiastically work together to achieve them.  It also reveals so well what the organization sees as its raison d’être:  saying that a company’s main mission in life is “market share”, as they point out, is meaningless to customers…saying that its mission is to create furniture which is simple and beautiful and so inexpensive that many, many people can afford it, well that is exciting and is exactly the reason for Ikea’s worldwide success.   In fact one of the best aspects to this book is the inclusion of lists of widely used phrases which are used to describe visions, missions, values and so on…so many of which have little or nothing to do with customers and/or are simply platitudes designed to impress shareholder readers of Annual Reports.  (Speaking of shareholders, I would add that not making “shareholder value” as the #1 goal of the company but instead focusing on the very things which will actually achieve that goal, pleasing customers and creating a work culture in which people are far more likely to engage, is a far, far better approach:  Whole Foods Market, the world’s biggest and most successful organic grocer, does exactly that).  It is one thing to prioritize the wrong values, but quite another to promote behavioral values which are not lived;  I certainly agree with Stigter and Cooper that, too often, high performers who violate carefully nurtured values are tolerated and even rewarded.  As they tell us, values can be very negative inside an organization when they are unenforced.  Yes: better to be at zero (no values statements) than minus 50 (empty, unlived and unenforced values statements).

One of my favorite ideas in this book is that we need people who “Want”, “Know” and “Can” make strategy (and anything else) happen. This applies to all levels from C-suite to line workers, and is why good recruiters are worth their weight in gold: nothing happens if these three conditions are not met inside the individual. This is highly relevant not just to strategy but also to the field of engagement:  so little is written about it, only about creating the right culture in which engagement will flourish, and it is good to see it covered in such detail here. A strategic plan…or a culture… can be great but some do not engage: they don’t want to, for some reason, or are not capable, or do not see how what they do fits into the whole. Yes, management can be partly to blame for this (especially the third reason), but in some cases, even many cases, individuals fail to make the choice the organization wants and needs them to make.  No wonder that the very best companies, like Google, spend so much time and resources interviewing potential recruits.

Another idea is that things are done so much better in teams; this book provides extensive guidance for helping teams create their own versions of the overall vision, or example, so that they feel ownership, and the probability of them truly committing to that vision is greatly increased. At the same time, one must have one’s eyes open for the individuals with the “outside the box” ideas……what Steve Jobs called “mavericks” (not to be confused with “self serving loners”).  This is the fine balance between “we” and “me” which only the very best organizations understand and carefully create.

There are many more things to discover in this book, which I greatly enjoyed, as I think you can see. It is refreshing to see strategy and culture blended in this way; in fact the more I read, the more it became clear that in reality, they are not separate “things” at all;  ideally they are just different aspects of one integrated process.  I hope those of you who read this review will take a look at the valuable ideas in this book and allow them to make you a better strategist.  _______________________________________________________________________

Disclosure: Professor Sir Cary Cooper, co-author of the book reviewed in this post, is also co-author of David’s two books, Employee Morale: Driving Performance in Challenging Times and The High Engagement Work Culture: Balancing ME and WE which are available worldwide from Macmillan, Amazon, etc. in print and digital format.  Visit David’s website for all things engagement, culture and emotional intelligence at work:  www.davidbowlesphd.com

I know, my title begs comparison with so many other great companies:  Google and Facebook come to mind in the US, along with many others around the world, like BMW. But I think Whole Foods has them beat.  It’s all about….

Culture:

We have to start here because there is nothing else which even comes close in importance.  Lets quickly define culture as “the way we do things around here”, and the way that Whole Foods does things, as well as how it does them, is extraordinary.   Its so easy to make statements about “what a great company we are, how we believe this or that”….but to really live those statements, well that’s quite a different thing.  Whole Foods, more than any company I know, lives its culture more openly and honestly.  Let me give you some examples:

Executive Pay:

 John Mackey, Founder and Co-CEO of Whole Foods Market (WFM), decided some time ago that the pay of executives in the company had to be capped in relation to what others there were paid.  He sets that ratio at 19:1.  Bear in mind that in the US, this ratio among the largest 500 companies is between 450-500:1, depending on your source.  So this is no small difference, its a giant chasm.  Mackey says that WFM has never lost anyone because of this.  This is because great executives work for more than pay, and anyone who doesn’t would not have been hired in the first place.   Now why does this all matter?  Shouldn’t we just say that an executive deserves all that he/she can get?  No and for two reasons:  first because most of these big pay packages are not related to performance.  CEOs often get paid regardless of how shareholders do, for example.  Carly Fiorina, who is going to run for President in 2016, drove the HP stock price down 60% during her time as CEO, yet received a giant $40 million plus severance package when she was forced out.  Secondly, I don’t have the data to prove it but if your pay is 500 times mine I am not going to think too highly of you, especially when you get on the Intranet with a message for me and my fellow “team members” that “we’re all in this together”.  No we’re not!!  You are on another planet….the one with golden rings around it.

Caring About Customers and Workers First, Not “Shareholder Value”:

Whole Foods’ values are easily seen in each store; often hanging on circular signs near the cash registers.  They begin with customers at #1, then talk about having happy employees, at #2….profits don’t come till #3.  How refreshing, nothing about shareholder value until the customers and workers are taken care of…..and yes that IS what happens to them.  Mackey and his team make sure that workers have decent pay and health care and have done so long before government forced all to do this.  I do not go there all the time, but when I do I am treated extremely well as a customer.  This is my field, my radar is tuned to unhappy workers (especially in places that say they want them to be happy) and WFM workers are friendly and helpful and knowledgeable.  I have seen this at the flagship store in Austin, Texas, near to which I lived for a couple of years and in stores in California.  Like most people, my radar can detect miserable, badly treated workers;  that’s my job, and I see quite the opposite at Whole Foods.  I see engaged workers.  Customers first, employees second…then we can think about the shareholders after that:  perfect.  Without happy customers and workers, there is nothing generated for shareholders anyway, so if most of them thought about it, they would put themselves third as well.

Caring for the Environment:

It might seem like a small thing, but its not:  Whole Foods banned plastic shopping bags long before individual cities and towns did in the US, and certainly long before the state of California attempted to do so……as yet unsuccessfully.  Those bags often end up in the Pacific Ocean.  Many don’t care, both companies and customers, but Whole Foods does.  It sees itself as a citizen of a planet to which it wants to contribute something positive.  So no plastic bags there, just a paper one for which you must pay, or your own resusable bag, please.

Fair Trade:

Companies like Wal-Mart are famous for “squeezing” suppliers.  Whole Foods goes in another direction.  Instead of making the most possible profit from overseas suppliers, for example, they subscribe to…and live by….so called Fair Trade principles.  This means that those (often) subsistence farmers and growers can make at least a decent living by their local standards.   This is a sustainable system, it is not one where one party to the deal squeezes the other one out of existence.  Some might say that this is a luxury which only high end customers can afford to support.  But Fair Trade goods do not necessarily drive up prices too much, and many less-than-wealthy customers are willing to pay a little more to know that they are affecting change in some remote part of the world where their coffee is grown.  I know I am, and I am happy to be far from alone.

Delivering Healthy Food:

When I walk into a Whole Foods store I know that nothing there will be bad for me, in moderation of course!  All kinds of dangerous additives and preservatives are banned, well beyond what authorities already ban.  If you don’t like GMOs (I don’t care, to be honest) then even those will be gone soon and in any case all packages are labeled so you can make a choice.  Again, this is not mandated in any state, but WFM does it.  But even more than this, there is something else which makes my heart warm when I go to buy animal products:

Treatment of Animals:

Whole Foods has a 5 point credo when it comes to how animals are treated and they police their providers so that this happens.  Eggs are not from caged chickens;  pigs and other animals must have space, not the nightmare conditions in which many are raised.   No antibiotics for chickens or anything else, no growth hormones.  Compare that to going to some places and thinking, “I wonder if they really adhere to what they say they do”.  I never think this at Whole Foods;  I have studied them, written about them in a book, and I trust them.  Its that simple.  So my wife and I, who are not in the 1% elite by any means, and live on a modest budget, can go to WFM for certain things and buy with the confidence that our strongly pro-animal rights and healthy eating values are respected…all without breaking the bank.

Its a pretty amazing story for a bunch of hippies to found and grow the world’s biggest organic grocer from a single, tiny store in Austin, Texas.  Something like that does not happen by chance.   John Mackey and his team have done it with the power of their values and beliefs, which they translated into a culture that in turn created a place where people like to shop and others like to work.   Its a sustainable and ethical approach where, best of all, everyone…everything…wins.  Not just top management, but also the animals and the growers/farmers around the world.  This company represents a refreshing face of capitalism which others would do well to emulate……and which future consumers will demand.

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David’s two books (co-authored with Professor Sir Cary Cooper) on morale, engagement and culture in the workplace are titled Employee Morale: Driving Performance in Challenging Times and The High Engagement Work Culture: Balancing ME and WE and are available worldwide from Macmillan, Amazon, etc. in print and digital format.  The second book featured an extensive analysis of Whole Foods Market, its culture and values.  Visit David’s website for all things engagement, culture and emotional intelligence at work:  www.davidbowlesphd.com

]]> https://davidbowles.wordpress.com/2015/03/30/is-whole-foods-the-best-company-in-the-world/feed/ 0 1821 davidbowles WFM Bag https://davidbowles.wordpress.com/2015/03/16/mining-your-engagement-data-not-just-for-the-big-guys/ https://davidbowles.wordpress.com/2015/03/16/mining-your-engagement-data-not-just-for-the-big-guys/#respond Mon, 16 Mar 2015 18:59:03 +0000 http://davidbowles.wordpress.com/?p=1801

Making Sense of Engagement Data:

Take a look at the data table above:  this isn’t just any data, its a tiny portion of the engagement survey results for one of our clients, in raw form.  Aside from the first five numbers, each digital row across the page represents the thoughts and feelings and identification of one person who works in this company.   This was voluntary, so they and the other 86% of the worker population which responded were good enough to spend the time to share this with us.  The question is, how much do we use this data to reward their trust and their time?

Of course, it is also the company which has invested time and money in this survey.  From their perspective,  we owe them the very best insight into this data which we can make.  None of this is possible unless we mine the data.  Presenting it back to the company, question by question, isn’t enough.  It misses the golden nuggets which don’t show up by going through each question, although that can be very compelling and it is certainly needed.  But its only the beginning of what can be discovered.

I didn’t come to this conclusion alone, my clients demanded it:  early on when I started to consult in this field, clients would see the question by question results and ask me:  “I see the details, but overall…..how is everybody doing?”  They were asking me for a single data point which would not only tell them the answer to this question, but which would also give them the chance to compare groups to each other inside the organization, and to compare results over time,  across the entire survey.

Some people in our business hate this:  they say that you cannot reduce the vast mosaic of survey results to one data point.  Yet you can, and you don’t lose anything:  the richness of the data is still available to you, if you want to look into it.  Think of it this way:  LDL cholesterol, blood sugar levels, systolic blood pressure or height to weigh ratio aren’t everything about a person’s health but each is a piece of critical data which points the way to other things, and collecting that information doesn’t preclude going into more depth elsewhere.  In fact it is often the first, crucial step.  Same with engagement data.

Internal Ranking and Its Huge Benefits:

A single score for engagement opens up what I consider to be the eighth wonder of the world:  internal ranking.  OK I am a bit passionate about this, I’ll admit it.  But internal ranking is powerful stuff.  It gives an organization so many benefits I am sometimes amazed all do not use it.  Instead they often look at outside benchmarks to see how they are doing.  This is a big mistake because the benchmarks are so incredibly unreliable, and can easily be the basis for making poor decisions.

Look at the chart below:  this is internal ranking at work.  With the average for the whole normalized at zero, each group, in this case production plants, is ranked against their internal peers (total plants).

Imagine doing this with your own data:  compare your managers in one location to all managers in all locations.  Compare your sales people in one area to all salespeople.  The list is endless, as are the learning opportunities.  If one emergency room (ER or A&E for those in the UK) manager can create such a great work environment that that ER is the highest engagement group versus all other departments in a hospital, while another hospital ER in the same small system has the lowest engagement score….(true story)…don’t you think the former can teach the latter something?  And yes both hospitals were in equally difficult socioeconomic districts with the same kind of ER challenges which that creates.

Internal ranking does something else which external benchmarks cannot do:  as in any research, you try to control as many variables which might affect your results, and in this case you can control a huge one:  organizational culture.  External benchmarks are a hodge-podge of data from very different organizations, often not even in your same business (let alone your direct competitors), and with very different cultures.   By going internal you completely avoid this problem and control the culture aspect of your results.

How To Do It:

Not every consultant can do this, and it is a bit more tricky than it might first appear.  You cannot easily drop data into Excel and get this kind of result back, which is why my firm developed our own database program called In*Sight, to do the job.  In*Sight can slice through data with great speed and it is based on solid statistical foundations.  Find a consultant who can do this, and make sure you understand the process and that it makes sense to you and is easily explainable to everyone at your company who will see the results.  This is important because if you choose to publicize the rankings internally, for example among managers (or whatever you call them), it will have no credibility if they cannot make sense of how it was generated.

Take it from me, internal ranking is one of the most powerful uses of engagement data, and can lead to insights into your organization you might never have had.  Internal areas of high engagement can be identified and you can find out what it takes, in your culture, to achieve this.  When you have replaced a manager somewhere and seen that team’s engagement ranking rocket up versus the rest of the organization a year later, you might become a believer too.  My clients have always waited impatiently for this analysis, and once you start to use it, you will too.

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David’s two books (co-authored with Professor Sir Cary Cooper) on morale, engagement and culture in the workplace are titled Employee Morale: Driving Performance in Challenging Times and The High Engagement Work Culture: Balancing ME and WE and are available worldwide from Macmillan, Amazon, etc. in print and digital format.  Visit David’s website for all things engagement, culture and emotional intelligence at work:  www.davidbowlesphd.com

(This is the second of two posts on this subject;  the first dealt with why you should consider using culture as a key element in deciding whether to invest in a company, and how to gather the information about it.)

Toyota: A Cautionary Tale About Culture

If you keep a good eye on news stories affecting your investments, you will sometimes find stunning evidence of how their culture has affected performance, both on the positive and negative side.  Take Toyota, for example:  in August 2009 the news about their quality problems, resulting in crashes, made headlines for a stunningly long time and both their Lexus and Toyota brands were affected.   It all began in my home town of San Diego, when a tragic accident happened involving an off duty police officer and his family, where he could not stop the car from accelerating.  He and three others in the car died.  Unfortunately this was only the beginning:  in January 2010 Toyota was forced to announce it was suspending the sale of eight of its best-selling vehicles, a move that cost the company and its dealers a minimum of $54 million a day in lost sales revenue.  In the end, Toyota paid a huge fine for covering up quality issues:

“In March 2014, Toyota agreed to pay a fine of US$1.2 billion for concealing information and misleading the public about the safety issues behind the recalls on Toyota and Lexus vehicles affected by unintended acceleration.”

Having been a Toyota fan since owning an incredibly reliable car of theirs some time ago, I was curious how a company with such a good reputation for quality could fall so fast…until I read a shocking article about the culture at their HQ in Japan in the Los Angeles Times.   Here is a quote:

“For the Toyota Man, the demands involve following rigid military-style rules that teach workers to sacrifice individuality for the good of the group. The guidelines dictate nearly every facet of employees’ day — how they turn corners while walking on company property, where they eat their lunch and even how they conduct themselves at home.”

Can you imagine a US company which dictates how you walk down the corridor, exactly how you hold your arms while turning corners? This is what they did.  Now extend this to the overall culture of the company and imagine how this level of control would affect you if you worked there.  Would you feel free to bring up…quality issues?  Any issues?  Does this sound like a culture in which problems can be openly discussed?  A place you would actually like to work?  Not in my view. Now we cannot say for sure that this culture created the quality problems but one thing is certain:  treating workers like this is no culture in which I would invest.  Where is the freedom for creative and enthusiastic participation in the company’s operations, when even the simple activity of walking is carefully regulated?  Not only that but this scrutiny extended to what employees did outside the workplace, like at home.  Based on this, I would steer clear of that as an investment until I was sure their culture had shifted…which may have started.  Just in the last few days Toyota has reported bringing in foreigners, including Americans, to the very top management ranks in Japan.  About time.  Guess what will happen if Americans are asked to walk a certain way down the corridors of HQ….!!

BMW’s Successful Culture:

In contrast to Toyota, but in the very same business, BMW is an example of how to do things right, culture-wise.  The Munich-based company is a world leader in luxury automobile and also in motorcycles.  I had the good fortune in 2011 to interview its next CEO, the brilliant Harald Krüger,  when he headed Personnel.  I had asked for this interview because I was writing a book on work culture and I had read something about the company:  that it deliberately keeps a lid on top management pay in order to protect its relationship with its workers (an activity it calls “personnel politics”).  How about that?  Which US auto company head ever said something like that?  I can save you time with a Google search:  the answer is none.  Why is this important?  Because, as I said in the last post, culture is everything when it comes to companies executing their strategies successfully;  therefore, anything which undermines culture, like over the top CEO pay for less than stellar performance, is a bad, bad thing.  BMW’s whole top management team (7 people) together made only 18 million Euros in 2010.   A single US CEO would scoff at 18 million Euros (about $19.08 million as of today), especially to head a company the size of BMW.

Guess what the return on investment was for BMW’s decision to pay careful attention to their “personnel politics”?   Their next CEO told me BMW rocketed out of the Crash of 2008-9 not just because of Asian demand but also because the workers had been treated so well during it, that they jumped on board willingly for the rapid rebound.

Culture is a powerful driver of performance.  It can make or break a company and has done so many times.  Investors who don’t so their utmost during due diligence to look at this aspect of what might affect their investments,  are missing out….big time.

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David’s book (co-authored with Professor Sir Cary Cooper) on the Crash of 2008, the effect work culture had on this, and how we can learn from this to do much better, is titled The High Engagement Work Culture: Balancing ME and WE and is available worldwide from Macmillan.  It includes an exclusive interview about work culture with BMW’s next CEO, Harald Krüger.  Visit David’s website for all things engagement, culture and emotional intelligence at work:  www.davidbowlesphd.com

Additional disclosure: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.

“Culture Eats Strategy for Breakfast”

(Peter Drucker)

What Is Work Culture?

What is culture when we apply to it the workplace?  The best definition is the most simple:  “the way we do things around here” *.  Each company or other organization has a unique culture and that usually flows from the personality, values and beliefs of the leadership.  Since it is all about how everything is done (and what is done and not done) in an organization, we can measure it, usually with surveys, and compare it to the past, or compare it to what others do and how they do it.

Why Is Culture So Important?

Lets start with what gives a company a competitive edge:  increasingly, research shows that it is culture that makes as much difference as anything else.  Culture is what made Apple not Dell, Google not Yahoo and so on.  Of course a great product or service is also essential, but how does that come about?  The culture makes it happen, as in the famous phrase “insanely great”.  Steve Jobs’ personality has been endlessly documented and, especially since his death, millions have read his words of wisdom.  He created the culture of Apple, and, as we know from history, when he was not there the company’s culture changed, and Apple went downhill and almost did not survive.  I am not the one who decided this was all about culture, it was Jobs himself who said so:

“John Sculley ruined Apple and he ruined it by bringing a set of values to the top of Apple which were corrupt and corrupted some of the top people who were there, drove out some of the ones who were not corruptible, and brought in more corrupt ones and paid themselves collectively tens of millions of dollars and cared more about their own glory and wealth than they did about what built Apple in the first place — which was making great computers for people to use”  (emphasis added)

Culture and Execution:

As the Peter Drucker quote which starts this post says, the best strategy in the world is not going to be successful if you cannot execute it.  You can say you want to run the London marathon, but if you aren’t in shape you wont even make it the first mile.  Culture is about being in shape….or not.  It alone determines whether your people will choose to be engaged with their jobs and the organization.   All of this together means that culture drives performance….period.  I’m talking about customer satisfaction, profitability, productivity and even worker health.  That is why it should be of crucial interest to every investor, if that investor wants an edge.  Due diligence on the company’s financials is all very well and totally necessary, since a great culture and lousy financials will still land a company in bankruptcy;  but due diligence on its culture is much less frequent and equally powerful.

Where to Get Information on Culture:

As a consultant in the field of culture, morale and engagement, I have had lots of opportunity to look at companies’ cultures over many years.  But such inside, confidential information is usually not available to the average investor.  So how can you do it?  The secret is to read a lot, do some research, find out what you can about what customers and employees think about these companies.  There are some websites where this information is discussed, but be careful:  making an investment based on some disgruntled workers whose opinions may not represent the whole company is a very mistaken approach.  Unless that worker voice becomes so loud that it is clearly more than a few people, and becomes a trend.  Another course is the “Best Places to Work” contests which are carried out in the US (published in Fortune magazine) and UK (published in the Sunday Times), for example.  While they hardly use scientific data, they are a step up from some other sources.  Google usually wins the US horse race, and of course over time has been a great investment.

Better information is available from people who write books, sometimes about their own companies;  others, like me, do in-depth research into companies’ cultures for books and articles.  An example of an insider talking about his company culture is John Mackey at Whole Foods, who has written both books and done interviews on the subject.  I recently featured Whole Foods Market and BMW in a book on culture, and would recommend any investor take a look at these companies based on their excellent cultures, which include a strong focus on good relationships with their people.  More about them in the next post.

A more recent source might be the companies themselves, especially in the financial sector:  as a result of the Crash of 2008 and the subsequent “great recession”, regulators are looking in depth at how the companies’ cultures played a role in this and whether more disclosure of this kind of information would be useful as a leading indicator of problems.  We’ll see if it happens.

What Parts of Culture Are Important?

Not all things which are done in an organization are equal in terms of the effect they have on people who work there.  The biggest impact is how an individual sees the ability of their boss and how they feel that person treats them. Quite a bit of research, including work I have done, shows that this can explain as much as 85% of the variability in how much people choose to engage at work, or their level of morale.  Other things which affect worker morale and engagement include whether people see fairness, for example, in pay, promotions, day to day treatment, assignation of tasks, and so on.  I will add something else here;  executive pay.  I can’t prove it, unfortunately, but some things in this field are common sense.  If an executive gets up and says “we’re all in this together” and he (usually he) is making 500x the average worker in the company, what do people think and feel?  Things which I would rather not repeat here, but they are not positive….now lets be clear, the number 500 isn’t pulled out of the air, it is the actual ratio of CEO pay to the average worker in the 500 biggest companies in the US.  Far higher than in Europe (25:1) or anywhere else.  So what I am saying is that if you start to hear that people are dissatisfied with the way they are managed, or the pay of their CEO is way above average while the performance in no way justifies it (which is very, very common)….steer clear as an investment.

Investing for culture is a great idea, even if the sources of information are limited.  Great cultures produce great results and great results are rewarded in the stock market.  In the next post I will go through some companies whose cultures merit positive attention by investors, and one which should alarm all of us.

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David’s book (co-authored with Professor Sir Cary Cooper) on the Crash of 2008, the effect work culture had on this, and how we can learn from this to do much better, is titled The High Engagement Work Culture: Balancing ME and WE and is available worldwide from Macmillan.  Visit David’s website for all things engagement, culture and emotional intelligence at work:  www.davidbowlesphd.com

Steve Jobs quote: Statement in The Computerworld Smithsonian Awards Program oral history, (1995–04-20), quoted in http://en.wikiquote.org/wiki/Steve_Jobs

* quoted in the excellent book “Corporate Cultures: The Rites and Rituals of Corporate Life” by Allan A. Kennedy and Terrence E. Deal

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Additional disclosure: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.

I am very pleased to announce that my new website is now live, featuring everything I do:  keynote speaking, consulting both at the organizational and individual level, researching and writing books.  All this work is designed with one goal in mind:  to help your organization become more capable of achieving its mission.   For a long time now I have worked in the fields of worker morale and engagement and work culture, helping clients do just that.   Let me use my extensive education and experience with many clients around the world to assist your organization in these areas.

Here are some examples of how I can help you:

Keynote Speaking on Morale, Engagement and Culture:

I enjoy everything I do, but this more than anything else:  connecting with people on these subjects, explaining the importance of them and how everything fits together to create what I call the “High Engagement Work Culture”.  What is the role of management and of the individual worker in engagement?  How best to find out your levels of morale and engagement, and the nature of your culture?  These are critical questions I can answer.  Let me customize a keynote for you and bring the knowledge I have put into two books, and shared with many clients, to your team(s).

Research and Consulting:

My research firm, Research & Consulting International, in existence since 1988, can conduct anything from small surveys to worldwide ones for your organization.  Together with our technology partners, and using our own data mining software, we can let you know how your people are feeling about everything related to work, where the pockets of both high and low engagement are, and why they are high, low or just average compared to the rest of your organization.  Where and who are your “engagement champions”?  We can find them and you can learn things from them which can be used elsewhere in your organization.  We’ve done it many times.

Already use a survey firm and want some outside advice?  Let me see what you are doing and whether it falls within “best practices” in this field.  Are there much better things which you can do with your data, for example?  A better questionnaire?  Different strategies for follow-through?  I can advise you.

One-on-One Consulting:

Alternatively, let me consult with you one-on-one if you are a leader in your organization.   I have worked with hundreds of CEOs and C-level executives over the years, and know the kinds of challenges you face.  With a strong background in psychology and management sciences backing up that experience, I can create a confidential and trusting environment and help you in ways that will be valuable to you as a leader, that go well beyond “coaching”.

For much more information, including a sample of the keynotes I can deliver for your organization and some of the clients with whom I have worked, please visit the new website, and contact me with any questions.  I will be very glad to hear from you.

LinkedIn profile/contact: http://www.linkedin.com/in/davidbowlesphd

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Yes, what did go wrong?

I have been a big fan of Brian Williams for years.  In fact ever since he covered the terrible story of Princess Diana’s death in Paris in August, 1997. I was driving over the mountains from California into Oregon one beautiful summer day and the news came on the radio.  When I go to a motel and turned on the TV, Brian was there for hours covering the story with great intensity and sensitivity.  I was brokenhearted by the story, one of my country’s greatest progeny had been cut down in her prime.  But I was hooked on Brian as a news anchor.  He was the consummate reporter, with an honest face and way of acting, so I thought anyway.  He was steady and unflinching in bringing the details to his audience.

Fast forward to today and I am still a bit shocked by what has happened. Brian has been caught fabricating stories about himself, burnishing his image in ways that seem to have surprised…himself.  He said on air, before he was suspended for 6 months with no pay, that he felt like he was going crazy,  discovering what he had done.  I don’t doubt it because I know something about this.

Brian Williams just woke up and met his EGO.  Like a psychological virus which often lies dormant, as viruses do, for years;  only to pop up one day and shock the daylights out of us with what it has been doing all along, controlling what we do and say.   If you have never had something like this happen to you, then you’re lucky, because I certainly have.  I don’t think I am alone in this at all.  If anything, ego is rampant these days, its everywhere.  One of the best things ever to happen to our egos is social media:  we can pretend that hundreds, even thousands of people are acutely, intensely interested in the minute things of our lives, what we might be doing moment to moment.  I had a woman give me her Twitter handle at a large conference on human resources and as soon as I connected to her feed found that she was tweeting about each store she was in, and which aisle.  This was a business contact!!  Before Facebook and Twitter no one really would have fooled themselves into this, only our nearest and dearest might be interested in such things, and even then not all the time….

In my way of understanding this, ego is more than just “I”.  It is a false “me” which comes about when we don’t really like ourselves and want to create a new identity which might be more acceptable to the world.  Gurus meditating on mountaintops don’t have egos because they don’t worry about what others think of them and don’t play the game of trying to please them.  They have transcended ego.  The rest of us, from the slightly enlightened to the totally unenlightened,  are stuck with one.  The best we can do is be aware of it and try and keep in under control.

Let’s look at Brian Williams in this light:  his lies were all about being a heroic figure.  This is classic ego:  self-aggrandizement, often so that the “new” image our ego projects of ourselves makes us better than others.  Brian, somewhere in the depths of his soul, didn’t think he was good enough, just as he was.  No, he needed to be burnished.  I know it seems crazy to think a handsome, multi-millionaire star of TV news with 10 million nightly viewers could have such a problem, but such is life that it is far from unusual.  Brian must have far felt less than good about himself, otherwise his ego would not have lept to his defense to create a “superman Brian”, under attack in Iraq or saving people as the former volunteer fireman he was.

Remember the classic Saturday Night Live with Michael Jordan being given an affirmation (which he didn’t need) by a character (“Stuart Smalley”) played by Al Franken?  It was: “I’m good enough, I’m smart enough, and by golly people like me”.  It was hilarious and a great send up of all self help industry and all the groups which had sprung up from it.  I don’t expect Brian to be doing something like this any time soon.  But he must still be in a state of shock at this point and that will last for a while.  He will doubtless get the best help which psychology can provide and hopefully he will emerge wiser and more in control of his ego.  I am willing to bet on it.  He will be a lot happier, and not prone to shocking surprises from his hidden self, that’s for sure.  I doubt he will come back to his job;  his employer might fear another “psychological virus outbreak” and the public trust may never return.  But I wish him well.

Personal Note:  David’s ego wants you to know he has written one of the few chapters dedicated to the ego at work that you will find in any business book.  See it in:

The High Engagement Work Culture: Balancing ME and WE (Macmillan, 2012) by David Bowles and Cary Cooper

Read more about how ego affects work among managers here;  and among other workers here.

I can hear the responses now:  “that’s not true, we implemented a recognition program last year and it engaged a lot of people!”  No it didn’t:  it created a shift in the environment in which people got recognized more than they had.  That environment, which is also called culture, was perceived favorably enough by people that they had a sense of well being, i.e. they liked it, it made them feel good.  What normal person doesn’t like being recognized for a job well done?  And as a result of that shift in how people felt, that emotional shift, more people chose to put themselves more enthusiastically into the job and increase their psychological commitment to the organization.

When you read about engagement you always hear about what the organization can do to improve it.  That is OK, its necessary but not sufficient:  its like teaching only one of the pair how to tango, and forgetting that both need to know the steps.  Rarely do you read about what the individual’s role is in this, what they can do to enhance their own engagement levels, what type of personality it takes to be a real “engager”, what benefits they get from engaging.  In case people think this aspect isn’t that important, let me tell you a short story:  when I travel, which I do a lot, and go to almost anywhere in Europe, I meet people who ask me what I do.  When I say that I work in the area of morale and engagement at work, they almost always say “oh that’s about driving the workers harder (that’s the pleasant version, others talking about “screwing” them).  In other words, there are whole countries where almost anything the organization does is countered by an attitude which is anti-management, anti-organization and as a result certainly anti-engagement.  Whole countries whose workers are choosing not to engage because it gives the “other side” (management) too much advantage.  Should we be surprised that Europe’s performance is so poor, over such a long time?  The sad part about this is that engagement is such a driver of performance, that if the workers in those countries chose to engage they would ultimately benefit from the growth this would drive, from the increased job security which growth would bring, the increased compensation and promotional possibilities.  Not only that, they would feel good 8 or more hours a day, because engagement at work is about allowing positive emotion and living from it.  They would even be healthier.  Talk about shooting yourself in the foot…

I use this example to demonstrate the power of choice at the individual level, and how it can ruin even the best planned engagement efforts.  People have to want it, know that it works for them and not against them, and be willing to move from the emotional state of positive feeling which a work culture can generate in them (if they let it) to the behavior of engagement.

So lets be clear:  your engagement efforts will melt away unless you:

1. Understand that the choice to engage at the individual level is as critical as anything the organization can do…so you had better….

2. Have the right people in the job, people who are ready, willing and able to engage

3. Continually remind your people not only of the values and culture which you wish to nurture, but also what the benefits of engagement are for themselves and the whole organization: the “virtuous circle” which brilliant companies such as Google use to their advantage every day.

It takes two to tango.